Fixed Asset

An asset with a long-term useful life that a company uses to make its products or provide its services. Strictly speaking, a fixed asset is any asset that the company does not expect to sell for at least a year, but the term often refers to assets a company expects to have indefinitely. Common examples of fixed assets are real estate and factories, which a company holds for long periods of time.

fixed asset

An asset not readily convertible to cash that is used in the normal course of business. Examples of fixed assets include machinery, buildings, and fixtures. A firm whose total assets are made up primarily of fixed assets is in a less liquid financial position, thus entailing greater risk of a big tumble in profits if its revenues fall.

The tangible non-current assets of a similar company have a value of 3,700m [pounds sterling] and its intangibles have a value of 770m [pounds sterling].

The difference between the book value of Lolly Co's property, plant and equipment and the replacement cost of its tangible non-current assets is 2,900m [pounds sterling]--2,450m [pounds sterling] = 450m [pounds sterling].

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